Canada v. Curzi
T-1183-92
Noël J.
8/2/94
11 pp.
Appeal from Tax Court of Canada decision allowing defendant's appeal from assessments made by MNR for 1987 and 1988 taxation years -- Issue turned on deductibility of alimony paid by defendant to son in 1987 and 1988 after obtaining divorce in 1976 in which former spouse obtained legal custody of children, and after concluding agreement with son in 1985 in which defendant agreed to pay son alimony of $112 a week, annually indexable -- Son no longer lived with mother in 1987 and 1988 -- Lived alone, was of full age and sound mind but no financial resources since still studying -- In 1990, MNR denied deduction of alimony paid by defendant to son for 1987 and 1988 taxation years -- These assessments upheld and defendant appealed: TCC allowed appeal -- Under Income Tax Act (ITA), ss. 60(b) and 60.1(1), question whether in circumstances defendant's son remained in mother's custody at time he received amounts in question -- According to TCC Judge, Superior Court custody order still in effect in 1987 and 1988 -- Confusion between term "right of custody" in ITA and concept of "dependent child" -- Definition of term "dependent child" in Divorce Act referred to concept similar to that contemplated by obligation of support in Civil Code and assumed child could not support himself, whatever his age-"Custody" order creates right in favour of parent for whom made-Latter has ultimate responsibility for education and exercise of parental authority -- Custody right ceases when child becomes adult and independent, though he may remain dependent child in so far as unable to support himself since leaving parental home -- Existence of parental authority prerequisite to concept of "custody" -- TCC Judge erred in concluding defendant's son remained in mother's custody solely on ground he was in need after leaving mother's residence or that custody order had not been revoked -- Purpose of ITA s. 60.1(1) to permit deduction of amounts paid for benefit of child as long as child remains in custody of former spouse-Defendant's son had left mother's custody in 1987 and 1988, so s. 60.1(1) did not have effect of treating amounts he received from father as received by mother, with result not deductible under ITA s. 60(b) -- Appeal allowed -- Income Tax Act, S.C. 1970-71-72, c. 63, s. 60(b) (am. by S.C. 1993, c. 24, s. 20), s. 60.1(1) (as am. by S.C. 1974-75-76, c. 26, s. 31; 1980-81-82-83, c. 48, s. 30; c. 140, s. 29; 1984, c. 45, s. 20; 1985, c. 45, s. 126; 1988, c. 55, s. 38)-Divorce Act, R.S.C., 1985 (2 Suppl.), c. 3, s. 2(1), s. 34.